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Salary Vs. hourly rate for employees

Discussion in 'Lawn Mowing' started by Mr. C, Dec 29, 2004.

  1. Mr. C

    Mr. C LawnSite Member
    from Miami
    Posts: 69

    I'm trying to decide whether I should change from paying my employees salary (wage per day) to an hourly rate. I know I can cut down on my payroll expense by using an hourly rate but how do I keep the employees from taking advantage and not producing the work? I know there are some incentive systems for both pay scales but I'm not really clear on the specifics of any one system. Can anyone help?
     
  2. WigginsLandscaping

    WigginsLandscaping LawnSite Member
    Posts: 103

    This is not an easy question to answer.
    Will you be with them? If your operation is big enough to warrant a crew to be alone most of the time then I would hire a foreman on salary (per day) to run hourly guys. Why..??? Well the salary guy will have the incentive to get off earlier and get paid the same while rataining responsibility for the quality of work. The hourly people will get paid for the work they do. Nothing more nothing less. If you will be with them then just have them work hourly. You should be able to tell if they are riding the gravey train. If you pay everyone hourly then even the foreman will ride you. If you pay them all by the day then they wont want to work longer days so you may suffer. I believe that the situation i described above will produce the best results. I would be interested in what others say on this as well.
     
  3. Precision

    Precision LawnSite Silver Member
    Posts: 2,995

    I don't know how well they would work, but some options are:

    pay hourly with a per lawn bonus.

    ie $4.00 per hour and $1.50 per lawn. The idea is that the per lawn part should make up 25-50% of their income. This is a big incentive to work hard. Balance that with deducting the value of the lawn if you get a complaint, so they still do a good job.

    Same thing but pay a day wage and a per lawn bonus. this might work better IF you let them go home when they are done. And they won't complain as you add accounts because it is more money to them.

    These only work on resi accounts that are roughly the same size and if the bonus amount is significant.

    Day wages are not legal in most places. This is not salary. Check with the DOL.

    But paying a weekly wage plus commision would be the same thing so long as your employees are not temp workers.

    Salary is not a panacea for working your employees as many hours as you want. Again check with DOL.

    In the next year when I have employees, I am going to give weekly rate plus per yard bonuses a try.
     
  4. Mr. C

    Mr. C LawnSite Member
    from Miami
    Posts: 69

    Thanks. I thought about that scenario a while ago but it seems like is using one system or the other.
     
  5. Tn Lawn Man

    Tn Lawn Man LawnSite Senior Member
    Posts: 479

    The best system I have seen is the bonus system.

    Without boring everyone with the details it basically goes something like this:

    Tell the worker that they are responsible for the well being of Route X

    If Route X is done in a timely manner with few problems and the customers are happy then at the end of the season (and it MUST be at the end of the season) then they will receive $____ bonus.

    However, if accounts on Route X discontinue service because of the worker's neglect to the property or anything within the control of the worker or the worker is too slow in carrying out their responsiblities thereby causing the company to lose money then the bonus will go down. Also, if the worker leaves before the end of the season the bonus is forfeited.

    It is not fool proof but it covers the employer if the worker turns out to be a dud and rewards the employee for good work.
     
  6. Earth-N-Wood Landscaping

    Earth-N-Wood Landscaping LawnSite Member
    from Utah
    Posts: 7


    I totally agree with Yard Man on this one.... We use this bonus system and it seemed to be working well for us. It makes every employee to be more efficient and more productive...why? MONEY! Getting a bonus for doing a good job and keeping the properties in good shape is like getting a raise for the employees. The foremans get higher bonuses than the crew members but their movitations are higher since they all know they can get that extra money. We do this on quarterly basis and we select a property or two from each crew to watch closely throughout the quarter (We dont let them know which properties we are watching because it makes them to do good job on ALL of their properties!) to see how much improvement they have done with the selected properties. This will evaluate how much bonus they get...For example: They are offered $XXX potential quarterly bonus at the end of each quarter after the evaluation. If I feel they are doing 75% of what I am expected of them then they are getting 75% of the potiental bonus. I made an evaluation sheet that helped me to keep track of points of each catagory....for example: Time is worth 30 points, Customer Satisfaction is worth 10 points, Cleaniness 20 points, etc. totalling to 100 points. That way the crews feel the pressure about getting the jobs done on timely matter so they can get the most points since time is worth 30 points and so on... Hope this makes sense and will help you.
     
  7. Mr. C

    Mr. C LawnSite Member
    from Miami
    Posts: 69

    Thanks. I understand the point system but how do you determine the bonus amount so that it works for you and the employee. Like 100 points=$100.00 How do you get to those numbers?
     
  8. JasonX

    JasonX LawnSite Member
    Posts: 52

  9. Mr. C

    Mr. C LawnSite Member
    from Miami
    Posts: 69

    That sounds great for mow and go but what about condos and strip mall type properties. Do you know how could get in contact with these guys?
     
  10. Earth-N-Wood Landscaping

    Earth-N-Wood Landscaping LawnSite Member
    from Utah
    Posts: 7


    The point system will work well with the commerical accounts. In our system, we have 100 points possible and we are offering $200 to foremans and $150 to each crew member in potential bonus cash.
     

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